India Shifts Petroleum Exports to Europe

Amid on-going security threats in the Red Sea, India has rerouted its petroleum exports to Europe via the Cape of Good Hope, significantly increasing transit time and costs.

Key Points

Route Change: India’s petroleum exports to Europe have completely avoided the Red Sea route since June and July, shifting to the longer and more expensive route around Africa due to security concerns.
Security Threats: Attacks by Iran-backed Houthi rebels around the Bab el-Mandeb strait, a key route through the Red Sea, have prompted this shift.
Impact on Transit Time: Choosing the Cape of Good Hope route adds 15-20 days to the voyage and increases freight costs significantly.
Decline in Exports: India’s fuel exports to Europe fell by 25% from the second half of 2023 to the first half of 2024.
Ongoing Risks: With recent intensification in attacks and geopolitical tensions involving Iran and other regional players, the Red Sea-Suez Canal route is unlikely to regain favor with shippers soon.
Russian Oil Flows: Despite the crisis, Russian oil exports to India, which rely on the Suez Canal, remain relatively unaffected due to existing arrangements and the geopolitical alignment of Russia and Iran.